Japan Likely to Break 'Within 1% of GDP' Practice and Significantly Increase Defense Budget Next Year

Nobuo Kishi, Japanese Minister of Defense [Photo by AP Yonhap News]

[Asia Economy Reporter Byunghee Park] Japan is expected to allocate more than 1% of its Gross Domestic Product (GDP) to its defense budget for the next fiscal year (2022). This breaks the convention of allocating within 1% of GDP. The Japanese defense budget, which has increased for nine consecutive years until this year, is likely to see a much larger increase next year.

On the 20th, Nobuo Kishi, Japan's Minister of Defense, stated in an interview with the Nihon Keizai Shimbun that when preparing the government’s defense budget request, he intends to increase it without being bound by the convention of keeping it within 1% of GDP.

He argued, "We must strengthen our defense capabilities at a fundamentally different pace than before." He cited the need to enhance defense capabilities around the Senkaku Islands (Chinese name Diaoyutai Islands), which are disputed with China, and to strengthen response readiness in new domains such as space and cyber.

He also said that going forward, there will be no intention to base the defense budget on GDP. He stated, "We will firmly secure the necessary expenses to protect the country."

According to Nikkei, the Japanese government decided in the cabinet in 1976 the principle of setting the defense budget within 1% of Gross National Product (GNP). This principle was abolished during the cabinet of Yasuhiro Nakasone in 1987, and the defense budgets for 1987 to 1989 exceeded 1% of GNP.

However, even after this principle was abolished in 1990, the defense budget exceeding 1% of GNP or GDP (applied since 1997) occurred only in 2010, when GDP sharply declined due to the Lehman Shock. Although the defense budget has increased for nine consecutive years until 2021, the government request standard has consistently maintained around 1% of the previous year’s GDP.

Based on the preliminary GDP figure for 2020 announced on the 18th of this month, the 2021 defense budget, which was set at 5.3422 trillion yen (approximately 55 trillion won), a 0.5% increase from the previous year, is also about 0.997% of GDP.

Japanese Prime Minister Yoshihide Suga hinted at a significant increase in the defense budget during his first summit meeting with U.S. President Joe Biden in April. At that time, the U.S. and Japan confirmed in a joint statement after the summit their "determination to strengthen Japan’s defense capabilities" in response to China’s military buildup. It is known that during former President Donald Trump’s administration, the U.S. also demanded that its ally Japan increase its defense budget to at least 2% of GDP.

This content was produced with the assistance of AI translation services.